Atlantic Gold NL : and Spur Ventures merger agreement

7 April, 2014
Company Announcements Office
Australian Securities Exchange
10th Floor, 20 Bridge Street
Sydney NSW 2000
Atlantic Gold and Spur Ventures merger agreed

Atlantic Gold NL (ASX:ATV) (Atlantic) and Spur Ventures Inc. (TSX- V:SVU) (Spur) have today entered into a Heads of Agreement which sets out the basis on which the parties intend to pursue a merger transaction (Transaction) under which Spur will acquire all of the ordinary shares on issue in Atlantic by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) between Atlantic and its shareholders (Scheme).
The Transaction is subject to Atlantic and Spur each undertaking due diligence investigations in respect of the other party (including in respect of its business, operations, assets and financial condition) and each party being satisfied with the results of its due diligence investigations.
The Transaction is also subject to the parties negotiating and executing a legally binding Implementation Agreement for the Transaction which will include conditions precedent to implementation of the Transaction and such other provisions which are customary for a transaction of the nature contemplated (Implementation Agreement).
About Spur
Spur is a natural resource company headquartered in Vancouver, Canada and listed on the Toronto Stock Exchange Ventures Exchange. Spur's only material asset at this time is approximately C$28.7 million in cash.
Spur's Executive Chairman is Steven Dean, an Australian now resident in Vancouver. He has extensive experience internationally in mining, most recently as President of Teck Cominco Limited (now Teck Resources Ltd.), a major Canadian diversified resources company. Prior to joining Teck,
Mr. Dean was a founding director of Normandy Poseidon Group, (which became Normandy Mining) which was the largest Australian gold producer until its sale to Newmont Mining in 2002, as well as a founder of PacMin Mining which became a subsidiary of Teck Corporation in 1999.

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Suite 506

815 Pacific Highway

Chatswood NSW 2067

Australia

t +(612) 9410 0993 f +(612) 9410 0958

Atlantic Gold NL

ABN 82 062 091 909

www.atlanticgold.com.au
Spur's major shareholder is Sprott Asset Management, holding 19.4% of the Spur shares on issue.
Overview of the Transaction
Under the Scheme each Atlantic shareholder who holds fully paid ordinary shares in Atlantic will receive 0.05564 of a common share in Spur and
0.02782 of a share purchase warrant in Spur for each fully paid Atlantic share held. Each share purchase warrant will be exercisable for a period
of 4 years from the date of closing of the Transaction at an exercise price of C$0.60.
Each Atlantic shareholder who holds partly paid ordinary shares in Atlantic will receive for each partly paid share held 10% of the consideration otherwise payable to a holder of fully paid Atlantic shares for each fully paid share held.
Outstanding employee options on issue in Atlantic immediately prior to closing of the Transaction will be cancelled in exchange for the issue of options in Spur having the same expiry date as the original expiry date of the relevant Atlantic options.
Based on Spur's cash, the consideration proposed under the Transaction represents 3.5 cents per Atlantic fully paid share, which represents a premium of 30% over the closing price on 4 April, 2014 being the last day of trading prior to the date of this announcement, and 16.5% over the 20 trading day VWAP of Atlantic fully paid shares for the period immediately prior to the date of this announcement.
Mr Ronald Hawkes, the Chairman of Atlantic, said:
"We are delighted to have finalised the Heads of Agreement for the merger with Spur. The merger presents Atlantic shareholders with a most important first step towards the funding of the development of the Touquoy Gold Project, without the material dilution in the value of their shares that would have resulted had we taken a capital raising of this size to the market. It also repositions Atlantic's Nova Scotia gold assets, both the Touquoy and Cochrane Hill development properties and Atlantic's considerable holding of highly prospective exploration properties, in a Canadian company, with a TSX-V listing, and under the control of the Spur board and experienced in-country management who are highly motivated to add value to the asset portfolio including, importantly, finalising the preparations for, and pursuing the funding of, the Touquoy Gold project.
It is also pleasing that Spur has indicated that the Atlantic managing director, Mr Wally Bucknell, will be invited to join the Spur board as a non-executive director upon the completion of the Transaction."

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It is anticipated that Spur will continue to be listed on the TSX-V following closing of the Transaction. Spur has agreed to pursue a listing of CDIs on the ASX in respect of the Spur common shares and Spur share purchase warrants issued to Atlantic shareholders under the Transaction, subject to the ASX listing and admission requirements being satisfied.
Alternate to the Scheme
In order to allow for the possibility that the Scheme is not approved by Atlantic's shareholders or the Court, Atlantic shareholders will additionally be asked to approve resolutions for an alternate to the Scheme pursuant to which:
Atlantic will sell to Spur all of the securities on issue in DDV Gold Limited, the wholly-owned Canadian subsidiary of Atlantic which holds all of Atlantic's Canadian assets for the issue to Atlantic of Spur Series A Preferred Shares and Preferred Share Warrants in the same numbers as the numbers of Spur shares and share purchase warrants respectively that would otherwise have been issued to Atlantic shareholders under the Scheme; and
Atlantic will offer to buy back all the Atlantic fully paid and partly paid ordinary shares on issue by means of an equal access share buy-back with the Spur Series A Preferred Shares and Preferred Share Warrants received by Atlantic for the sale of DDV Gold offered pro-rata to Atlantic shareholders as consideration for the buy-back.
The Spur Series A Preferred Shares will be non-voting shares and will not rank for dividends paid to Spur common shareholders. Each Series A Preferred Share transferred to an Atlantic shareholder who accepts the equal access buy-back offer will automatically convert to a Spur common share ranking equally with all other Spur common shares on issue.
Each Spur Preferred Share Warrant will be exercisable for a period of 4 years following the date of issuance at a price of C$0.60 per Preferred Share Warrant, and, if exercised, will result in the issue of one Spur
Series A Preferred Share. Each Preferred Share Warrant transferred to an Atlantic shareholder who accepts the equal access buy-back offer will retain the same term and exercise price, but will automatically revert to the right to receive 1 Spur common share for every 1 warrant exercised.
Atlantic will have the right to convert Spur Series A Preferred Shares held by Atlantic to a maximum of 10% of the total number of Series A Preferred Shares issued to Atlantic pursuant to the sale of DDV Gold. Upon the exercise of this right by Atlantic, a number of Preferred Share Warrants which is 50% of the number of Spur Series A Preferred Shares converted by Atlantic will be converted to warrants to purchase Spur common shares.

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Short Term Loan
Spur has agreed to replace Atlantic's existing A$1 million debt with a C$1 million loan facility, which can be drawn in July 2014, conditional upon the prior execution of the proposed Implementation Agreement for the
Scheme merger, and that the Implementation Agreement remains in good standing, and repaid by 31 December 2014.
Further Terms and Conditions of the Transaction
Under the Heads of Agreement Atlantic has agreed to certain exclusivity arrangements, including no-shop and no-talk arrangements, notification obligations and a 5 business day right to match any competing proposal. Only the no-talk arrangements are subject to a fiduciary out.
Atlantic has also agreed to:
a reimbursement fee of A$750,000 payable by Atlantic to Spur if during the due diligence period, Atlantic, directly or indirectly, was aware of or becomes aware of or receives from a third party an actual, proposed or potential competing proposal (for the avoidance of doubt, whether or not such proposal is subject to any pre- conditions, whether or not such proposal is in writing and whether or not legally binding) and, within 12 months of the announcement of such competing proposal, the third party or any associate of that third party:
� acquires (whether directly or indirectly) or becomes the holder of, or otherwise acquires, has a right to acquire or has a legal, beneficial or economic interest in, or control of, all or any material part of the business or assets of Atlantic or any of its Subsidiaries; or acquires control of Atlantic or any of its Subsidiaries; or otherwise acquires or merges (whether
directly or indirectly) with Atlantic or any of its Subsidiaries;
or
� enters into an agreement, arrangement or understanding with Atlantic or the Atlantic Board (whether directly or indirectly) requiring Atlantic to abandon, or otherwise fail to proceed with, the Transaction, or requiring any Atlantic board member to recommend against, or otherwise not endorse, the Transaction,
whether by way of takeover bid, scheme of arrangement, shareholder approved acquisition, capital reduction or buy back, sale or purchase of shares, other securities or assets, joint venture, dual-listed company structure (or other synthetic merger), or other transaction or arrangement. (Atlantic has agreed to the Implementation Agreement also containing a reimbursement fee to this effect);

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the Implementation Agreement containing a A$750,000 reimbursement fee if the Atlantic directors change their recommendation in favour of the Transaction or recommend that Atlantic shareholders accept or vote in favour of or otherwise support or endorse (including support by way of accepting or voting, or by way of stating any intention to accept or vote, in respect of any Atlantic shares in which a director has a relevant interest) any actual, proposed or potential competing proposal (whether or not such proposal is subject to any pre-conditions), unless the independent expert concludes in the independent expert's report that the Scheme is not in the best interest of
Atlantic shareholders (except where that conclusion is due wholly or partly to the existence, announcement or publication of a competing proposal); and
the Implementation Agreement containing a A$250,000 break fee payable in cash by Atlantic to Spur if Atlantic shareholders do not approve the Transaction in one of its proposed forms.
Major Shareholder Support for the Transaction
Au Mining Limited has advised the Directors of Atlantic that Au Mining Limited intends to vote all the fully paid ordinary shares in Atlantic held by Au Mining Limited, in favour of the Transaction and in favour of the alternative to the Scheme (as outlined in this announcement), in the absence of a superior proposal. Au Mining Limited holds approximately
17% of the fully paid ordinary shares in Atlantic.

Yours faithfully
Ronald Hawkes Wally Bucknell Chairman Managing Director Atlantic Gold NL Atlantic Gold NL
For further information please contact:
Christopher Ryan
Westchester Corporate Finance
Mobile: [phone]
Email: [e-mail]

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About Atlantic Gold NL

Atlantic Gold has a pipeline of development to exploration properties in the Cambro- Ordovician Meguma Terrane, Nova Scotia, Canada. To date the Company has defined mineral resources of 1.21Moz @ 1.6g/t of gold at the Touquoy and Cochrane Hill properties, with these including 454Koz @ 1.48g/t of Ore Reserves at Touquoy.

The resource and reserve inventory for the two projects is as follows:

Project Tonnage

(Mt)

Grade (g/t) Contained Au

(Oz)

Mineral Resources

Touquoy

Measured 2.8 1.5 130,000

Indicated 7.3 1.5 350,000

Inferred 1.6 1.5 77,000

Total 11.7 1.5 557.000

Touquoy West Indicated	0.9	1.9	54,000
Inferred	0.6	2.2	45,000
Total Touquoy	13.2	1.5	656,000
Cochrane Hill Indicated	4.5	1.8	251,000
Inferred	5.6	1.6	298,000
Total	10.1	1.7	549,000
Total Nova Scotia
Measured and Indicated	15.5	1.6	785,000
Inferred	7.8	1.7	420,000
Total Nova Scotia	23.3	1.6	1,205,000
Reserves Touquoy
Proved	2.49	1.48	118,000
Probable	7.10	1.47	336,000
Total	9.59	1.48	454,000

Atlantic Gold's exploration initiatives in the Meguma Terrane are directed to the discovery of open-pittable shale-hosted disseminated gold deposits similar to Touquoy. At the present time the Company maintains an active exploration land package of approximately 250km2 of mineral claims.

Property Ownership

A. Touquoy

Atlantic Gold as the operator and manager of the Touquoy Gold Project sole funds all capital and exploration expenditure. Once gold production at Touquoy has commenced Atlantic Gold will receive 100% of the Touquoy cashflow until all these expenditures plus interest have been recouped. Thereafter Atlantic Gold will share the pre-tax profit on a

60:40 basis with the vendor of the Touquoy tenements. A private royalty of 3% is also payable, two-thirds of which can be purchased for C$ 2.5 million.

B. Cochrane Hill

Wholly-owned, and subject to a private royalty of 3%, two-thirds of which can be purchased for C$1.5 million.

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Attribution

The information above pertaining to Mineral Resources and Ore Reserves is extracted from a report entitled "JORC Code 2012 Compliant Reporting of Touquoy Resource and Reserve Estimates and Cochrane Hill Resource Estimates" created on 28 February 2014, and in respect of Mineral Resources at Touquoy West from a report entitled "Touquoy Gold Resource Exceeds 0.5 Million Ounces" created on 12 July 2004, both of which are available to view on the Company's website, www.atlanticgold.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the original market announcement.

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